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Husband’s companies count as assets.

Posted on Jan 31, 2016

Husband’s companies count as assets.

Q During my marriage, my husband provided a high, in
fact, extravagant level of living for us and our four
children. We have homes in Boston and London. Our
children attend top private schools from pre-K to
graduation and on to college. Our standard of living
resulted from his investing in real estate in London in
areas that now have become very fashionable. As the
rents went up, so too did the value of the buildings.
My husband put title to all of these buildings into
several of what is called in the UK offshore companies.
He had complete control and full management of these
companies.
Now that he filed a divorce in London, he claims to be
broke. He has refused to produce documents in violation
of High Court orders. Can I file for divorce in
Massachusetts and force him to cough up documents?
DME, Boston and London
A Seemingly you were served with divorce papers in the
United Kingdom. So that court will continue to have
control over your divorce case.
You need a top family law lawyer in London. Go to the
International Academy of Matrimonial Lawyers at IAML.org
and look for English members of the Board of Governors
of the main organization and that of the European
Chapter.
That lawyer will tell you about the case of Prest v.
Petrodel Resources. The husband in that case played that
same game your husband is now playing. That guy lost.
So, too, will your husband. But nothing will be easy.
While I am over-simplifying, essentially the UK Supreme
Court said the trial judge properly could and did
conclude the assets in the corporations were held in a
constructive trust for the benefit of the husband. So
the corporations could be directly ordered to transfer
assets to the wife.
Beyond claiming a resulting trust, I believe your
English lawyer will also seek to pierce the corporate
vail. That will only happen if there is no other way to
provide you with about half the value of all marital
assets. So, if the total assets are $50 million; and
there is $25 million in non-corporate assets, the judge
will order you get all of the latter. And your husband
ends up with the assets in the corporation.
Another possible claim is what the Brits call the
“evasion principle.” That can be claimed if within a few
years before he filed his divorce, he put the property
into the corporations. If this applies to you, then
there is no need to pierce the corporate veil.
Of course, there will be many hurdles, and this will
take a few years to sort out. But if you hire a great
jumping horse of a lawyer, he or she should be well able
to let you ride to victory. Tally Ho.

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